BAGHDAD, Feb 19 (Reuters) – Iraq plans to increase its southern oil storage capacity to 15 million barrels by the end of 2015, to help cope with export bottlenecks caused by bad weather and to absorb rising production, a senior official said on Thursday.

Speaking at the opening of three new oil storage tanks near the southern city of Basra, deputy oil minister Fayadh al-Nema said the new facility will add more than one million barrels of capacity to the existing 9.5 million.

“Today we have managed to add more than one million barrels and boost oil storage capacity up to 10.5 million barrels. Another 4 to 5 million barrels capacity will be added by the end of this year,” Fayadh al-Nema told reporters.

Nema said the storage capacity increase will help Iraq to absorb expected rising oil production from the southern oilfields and also avoid export halts during rough weather.

“Production is rising steadily from the southern oilfields and we need more infrastructure to deal with extra crude volumes,” Nema said.

Export infrastructure, rather than production, is the main hurdle to the OPEC member keeping exports steady.

The southern oilfields produce the bulk of Iraq’s oil and the terminals are its main outlet to world markets.

Iraq’s oil exports fell to 2.535 million barrels per day (bpd) in January from a high of 2.94 million bpd in December due to rough weather.

E&Ps Locking in Cash Flows and Sales Prices OPEC’s agreement to cut production levels has kicked off a rush among shale oil companies to hedge their oil price risk above $50 for 2017 and 2018. The number of E&Ps selling oil for delivery next year has pushed the WTI forward curve into slight backwardation after two years of contango. Compare[Read More…]